The More Things Change

"Gun Control" is Violence...

...and promises of "gun control" are threats of violence.  Behind every gun control advocate's argument is a desire to harm millions for the supposed goal of saving hundreds.  The ones that know this have a hidden agenda that they dare not share for it will expose their evil nature.

I put "gun control" in quotes because the end-game isn't reasonable restrictions on firearm ownership but rather an all-out prohibition or disarmament.  Liberals have made this perfectly clear in places in Washington DC, New York City, Chicago, etc... where they use taxpayer dollars to prohibit taxpayers from utilizing their sacred, Second Amendment protected, right to keep and bear arms.  A right that has been re-affirmed by every high court that has ruled on the matter including the recent Heller case.

In spite of promises that disarmament will prevent violence, here are the reasons the exact opposite is true...

Why Europe Matters

Lots of eyes on Europe the last few days with people waiting for a "deal" or a "no deal."  Markets are up and down depending on the news which seems to indicate a deal has been struck as of this morning.  The Euros have decided private investors will take a 50% haircut on Greek debt!!!  Yeah, that will work out for them when they need to sell more debt in the near future.

While those of us in America are somewhat insulated from what is happening in the Eurozone, it's important to pay attention.  Here's why....

Watching the Other Hand

Sometimes we like to pretend that the Obama Administration is stupid.  It makes us feel better.  It offers an explanation for almost three years of failure in spite of promises of prosperity and hope.  I can't count the number of times I have heard liberals, who supported this President, say he's inept.  Apparently a newly formed conclusion in spite of the availability of information on this man's lack of experience and credentials prior to the 2008 election.

Downgrade: Taking the Wind out of Liberal Sails

Another first for the President!  Our nation's credit rating has been cut from AAA to AA+.  That's change, right?

The "Debt Debate," as the media has dubbed it, only existed because Obamanomics have failed.  If Washington could just be honest about that, we could have a conversation about how to fix the economy and move forward.  But Liberals can't admit it, and I don't expect them to do so--it's an admission that Liberalism (including Keynesian economics) doesn't work.  Never mind an entire century of modern history proving this inconvenient fact, we now have confirmed what we already knew and what Conservatives warned of nearly three years ago.

No One Left to Tax

I'm going to try to keep this simple:  The only people in the United States that pay taxes are the middle class. 

The middle class pay both direct and indirect taxes because they lack the mechanism to distribute these taxes to other socioeconomic groups.  The "rich" can distribute a higher tax burden to consumers, employees, reduce capital investment, decrease charitable donations, and hire an army of tax accountants.  Low income Americans are mostly exempt from income taxes and benefit from overlapping social programs that account for cost of living increases (to include increased consumer costs from taxing the "rich").

In the mind of a Liberal, our debt crisis is easy to solve because all we have to do is take "it" from "them" (corporations and "rich" people).  Michael Moore even went so far to say private property was a public resource that should be plundered so that reckless spending can continue.

The Giant Sigh

Giant sigh heard in newsrooms across the country as the media finds a disaster to report that isn't the result of Obama & Co. liberal policies.  Not only is it safe to report, it's safe to hyperbolize and policitize!  While the Japanese are suffering and in need of humanitarian aid, we are apparently more worried about energy policy.

Meanwhile, our economic situation continues to worsen with food and energy prices continuing to rise.

Why I'm Starting to Love Michael Moore

He started out as a sly propaganda minister and has now become quite the liability for the American Left.  It was easy in the beginning for folks to get sucked into Bowling for Columbine or Sicko without a good understanding of the man's bias or selective "fact" telling.  Now that bias and dishonesty is overt--and I like it!

"American is not broke..."  Moore exclaimed at a rally in Wisconsin on Saturday.

2010 Financial Review

Unlike a lot of people, I like to know where my money goes.  I book my expenses month-by-month along with my income and summarize it at the end of the year.  In addition to knowing where I am spending money, I also get an idea of how much in taxes I am paying.

The percentages shown are a percentage of gross pay before any deductions.  Total Expenses represents all discretionary and non-discretionary expenses to include housing, utilities, gas (excluding taxes), health and dental expenses, life and auto insurance premiums, charity, and special one time expenses.

QE Kills

I'm going to save the "I told ya so."  At many times we forget that 2 + 2 = 4.  No matter how many people say the solution is 5, their ignorance (or deception) can't stand in the face of current events.

The violence in Egypt and Tunisia along with protests in Albania, Jordan, and Albania are such current events.

Quantitative Easing (QE) has pushed global food prices so high that people in fragile economies are going hungry.  These people aren't protesting and turning violent because of a political or religious ideology--they are out of food.  This creates the kind of desperation that inevitably leads to violence, and even revolution.

State Bankrupcty

The idea to allow states to declare bankruptcy demonstrates just how dire the situation is for some states.  Make no mistake, we are being prepared for what is to come by people making it all sound perfectly normal.

The Federal government will have two choices should a state become insolvent...

1. Bailout
2. No bailout 

Bailouts have become politically untenable not to mention unsustainable as we saw with TARP--like a junky, one is not enough.  However, a state going belly-up is also unprecedented (get used to that word). 

The Pot Problem

With Marijuana initiatives on ballots all over the country you would think the country had little else to worry about.  Ironically, that is precisely why I believe so many are seeking legalization; a way to opiate the masses.

If you need any proof of that, read this LA Times article on George Soros' endorsement of California Proposition 19.  Why would a "multi-billionaire investor," who has made fortunes betting against national currencies, have an opinion on this issue?  Make no mistake about it, Soros doesn't care about personal freedom as his network of affiliated organizations assault our liberties on every other issue.  He cares about devaluing the dollar.  What better way to do that then give a segment of America, already depending on government programs, another reason to be dysfunctional? 

More irresponsible Americans = more social spending = higher taxes and inflation = weaker USD.

Aside from those seeking an opiate for personal or ideological gain, there are those of us Conservatives who are truly confused on this issue.  Something I like to call...

It's the Jobs, Stupid

It's a good that the Obama White House controls the media, otherwise, the country might actually hear about how huge of a miscalculation the President has made on "job creation."

According to the Republican Way and Means Committee, at the end of September 2009, the country has lost 2.7M jobs year-to-date. Obama expects 3.4M jobs to be created by year-end. That's a difference of ~6.2M jobs!!!

The stimulus has failed. It failed for the exact reason that non-partisan economists said it would fail; the money stayed in the public economy instead of being spent in the private economy. The public economy (government) creates debt. The private economy creates growth, jobs, industry. Stimulating the public economy wasn't going to create jobs but rather put more burden on the Americans who still have jobs.

Sooner or later the media will have to report this failure and Obama will have to respond. The best thing Washington can do is reduce spending and cut taxes. Of course doing so would be an admission that Regan-era free market economics are far superior to tax-and-spend socialism.

Pay Cuts!!!

Exercising questionable authority, the Obama Administration is ordering (via Treasury) bailout firms to dramatically reduce executive level pay and bonuses.

Couple of thoughts...

1. When you sleep with dogs... These bailout firms should have known better! Hopefully the government will soon get out of private enterprise, but if it doesn't, some of these firms would have been better off failing. Failure would have allowed bankruptcy protection/restructuring and at worst would have left market share in the free market rather than under government control.

2. We can't expect recovery when the best talent can't be compensated. Do you work for free? Neither do I and the best execs expect a paycheck as well. You can disagree with the amount of compensation all day long. If companies can't pay, they can't attract the talent necessary to recover. This is especially important given that most Wall Street firms, and some big banks, still have bad assets on their sheets. Should interest rates rise, or the mark-to-market rules changes, we'll see fall '08 all over again.

3. The market knows the free market can't recover with this level of government intervention and the Dow demonstrates this. As soon as news of the exec comp limits was released the market went from around +50 to close at -92.12 in about 45 minutes!!!

DOW 10,000!!!

Recession cancelled!!!

Not quite...

The fundamentals necessary for recovery are still lacking. Unemployment is increasing with no growth in GDP. So what's propping up the DOW?

Fear.

One would think that fear would tank the markets rather than create a ~1,000 point rally, right? It's not fear in the equities market, but rather fear of inflation.


Gold prices are probably the best forward looking predictor of inflation we have. Government data (CPI) won't come out for at least a year after inflation starts hitting while gold prices are driven by the market and reported by the exchanges in real-time.

Look at the same chart as above compared to GLD (a gold ETF tracking just under 1/10 spot price)...

The fact that GLD and the DJIA are correlated during this "rally" shows it's no stock rally at all but rather a flight from USD based securities and reserves into equities. What's worse, than a misreported rally, is that because the fundamentals are lacking, the market is poised for another fear induced sell-off. Investors will think "oh no, not this AGAIN!" at the first sign of bad news and we could quickly enter another sell-off cycle.

Also, consider that the Fed has kept rates between 0% and 0.25% for almost a year now. If we do start to see inflation the Fed may raise rates to kept it in check creating a new wave of bankruptcies as credit is constricted and interest payments increase--this could also crash the DJIA.

[No, I'm not telling anyone to buy gold or GLD! This is not that kind of blog.]

I'm hopeful the economy can recover but we have a long way to go. What's disappointing about the recent upbeat economic news (which I believe is more political than economical) is that we haven't addressed the underlying issues of this recession.

Historically, recessions can be a good time to re-tool, re-educate, and re-direct capital towards new business opportunities and growth. Recessions have a way of purging old business models that have failed and encourage new successful ones to take their place. I don't see any of this happening and all of Washington's promises on job creation (green jobs) have failed.

Waking up Homeless

"If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their Fathers conquered...I believe that banking institutions are more dangerous to our liberties than standing armies... The issuing power should be taken from the banks and restored to the people, to whom it properly belongs."

There is some debate as to if this entire quote can be attributed to Jefferson or not but it got me thinking...

If being "homeless" means not owning real property, how many Americans are homeless?

There are lots of folks who consider themselves "homeowners" but until they have the title in hand they are nothing more than renters. They have rented the bank's money (or the taxpayer's money in most cases) and pay interest--we call this a mortgage. If they fail to pay that rent to their landlord they are evicted.

Add to that most folks have little or no equity in their homes (combination of market conditions and financing) and all you have is a series of rent checks with no prospect of real ownership.

I fall into this bucket as well. And after living fairly conservatively over the years and saving for a sizable down payment, I estimate I have a 25-30% interest in my home. The bank owns the rest and if I slip up the bank owns 100%!

The illusion of "ownership" is maintained to keep Americans in their homes paying rent to banks and paying taxes on the market value of their homes--the value most will never realize unless our values change.

The manipulation of the dollar, combined with mass consumerism has put Americans in a corner. Families are stretching just to get by while banks continue to reap rewards backed by the Federal Reserve which can spend the people's money as it chooses.

The current institutional Fed rate is between 0% and 0.25%. According to bankrate.com, the current average mortgage rate is 5.49%, the current average CD rate is 1.35%, and the current average credit card rate is 11.20%.

So thinking back to Thomas Jefferson's quote, I wonder when this financial crises finally hits bottom, how many Americans will "wake up" homeless?

What He Said!

From a story on the suspension of the "Cash for Clunkers" program...

"If they can't administer a program like this, I'd be a little concerned about my health insurance," car salesman Rob Bojaryn said.


Exactly!

Now one could argue that the program was underfunded to start with, which leads me to ask "how could the government not know it was underfunded?" It comes down to not understanding the x factor. x being demand in this case.

Project that kind of mismanagement to health care and you have chaos. Consider the fact that there are many x's in health care and you have a complete disaster.

Once you get beyond on the morality plays, you begin to see just how unsustainable government controlled heath care will be.

Cap and Trade a Good Thing for the Free Market?

At first glance, no, it isn't.

"Cap and Trade" is indeed a direct and overt threat to the Free Market which houses, feeds, clothes, and shelters more Americans than government could ever hope to do.

The EPA has estimated Cap and Trade will cost the average household between $80-110 a year in excess energy costs. There is however no way to estimate what it will cost the country in terms of jobs (payrolls) and growth.

In a recession, efforts should be made to grow the economy, encourage investing, and reducing costs. Cap and Trade will create artificial restraints on the economy/GDP by increasing costs. This is something even the proponents will not argue and I fear is ultimately their goal.

Other policies have been silent killers like the CRA, Social Security, Medicare/Medicaid whose effects aren't felt for some time after implementation leaving plenty of room for politicking and finger pointing.

Cap and Trade will hurt the economy immediately and will force Americans who subscribe to populist politics to come to terms with consequences on their paychecks, standard of living, and the opportunities their children will have.

All of this should spark a conversation about what we are willing to give up in the name of populist politics and that may end up renewing respect for the Free Market.

Failure to Recognize

GM's bankruptcy announcement this morning has created a lot of reaction but little surprise. What's also unsurprising is the failure of the political left to recognize that socialist policies are at odds with the survival of America's largest auto manufacturer, and that more socialism will make the problem worse.

You cannot take wealth out the economy and expect private enterprises to stay in business.

Prime example, Michael Moore, who responds to this news with more "rainbows and unicorns" will save us rhetoric. His "message" is worth a read to jump into the mind of socialist and see how quickly they dismiss the natural consequences of their ideology.

Point-by-point...


1. Yes, we are indeed at war. The war between capitalism (which created this nation and made it great) and socialism (which seeks to destroy wealth, jobs, opportunity, and personal freedom).

Comparing cars to "weapons of mass destruction" isn't even worth a discussion. Every type of manufacturing (even "green tech") will have a impact on the planet. Every breath we take has an impact; is Michael Moore willing to end his life to save the planet?


2 - 4. The alternatives aren't ready for the market and no amount of government subsidies/taxes will make them self-sustainable. In order to be self-sustainable (i.e. employ a private work force) consumers must be willing to buy the product/service.

So I get to take a bullet train from Denver to Dallas in five hours--that's awesome! Just point me to the rental counter when I get there!

Our nation, infrastructure, and our lifestyle isn't suited to a radical compulsory shift to public only transportation. I've written about this before. It's also drenched in hypocrisy because we know our elitists will never give up their SUVs and private planes (why are SUVs still legal anyway?). And this is coming from a man who likely couldn't walk a city block without taking a break?!?


5. Yes I can see Farmer Joe loading his crop onto a bus! That'll be efficient all right.


6. The thrust to hybrid cars may be a huge environmental mistake. There are currently 250M cars on the road in America. Imagine if all those cars became junk overnight. The smartest thing to do is refit them with hybrid tech, but that would limit jobs.

And while forcing Americans to buy hybrids would certainly employ workers, those workers would still need consumers to buy those vehicles to make payroll. See a trend?

The hybrid market is tapped out. All the trendy eco-geeks who were willing to pay the hybrid premium have already done so. There are probably a handful of consumers in the margin waiting for their vehicles to need to be replaced, but the idea you are going to 250M gas only vehicles off the road is laughable.


7. Wind power doesn't work in the market and requires huge subsidies. Read much?

Everything else listed requires a consumer. Where are the consumers? If GM can't find people to buy cars how are we going to convince, I mean compel, people to buy wind turbines and solar panels?!?

And once you put the power companies/authorities out of business, how will the gov bail them out?


8. Why try and incentivize, it's time to start punishing!

The Dems control the White House and Congress. I ask again; why are SUVs legal? Why is private air travel legal?

If we really want to change, then let's change already!!!


9. Yes, that's just what the economy needs, more taxes. And here, Moore gets honest. This should have been his #1 but he chose wisely to bury it as #9.

Instead of recognizing how we got here Moore would rather utilize this opportunity to further limit freedom and control individuals.

The gas spikes of 2005 and 2008 had a horrible impact on the economy, but at least that money stayed in the private economy rather than being squandered by government.


Allow me to finish Moore's list with #10...


10. Seize the paychecks of all Americans and give them vouchers for anything the elites in government think they require. Housing, clothing, health care, fuel, everything. Make sure all Americans get an equal amount of what they require (social and economic justice).

Limit the damage done to the environment by limiting what Americans can do in their own lives. No more evil Walmart. No more vacations. No more private transportation.

Of course, Hollywood and Washington will keep their SUVs, sports cars, private planes and the steak and lobster lifestyle to which they've become accustomed.

When Americans fight back and refuse to go to work to continue to produce under these conditions, write laws compelling them to work. Every American will report to his designated work location each and everyday. Children will be institutionalized as early as possible, not for education (re-education), but for free "child care."



What does #10 have to do with GM's bankruptcy? Nothing. But then again neither do #1-9.

Finally, Some Economic Data that Makes Sense!

Sometimes things are way funnier than they should be first thing in the morning!